[Senate Report 105-90]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 176
105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-90
_______________________________________________________________________


 
                   HOOD BAY LAND EXCHANGE ACT OF 1997

                                _______
                                

               September 26, 1997.--Ordered to be printed

  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1015]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1015) to provide for the exchange of 
lands within Admiralty Island National Monument, and for other 
purposes, having considered the same, reports favorably thereon 
with an amendment and recommends that the bill, as amended, do 
pass.
    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Hood Bay Land Exchange Act of 
1997''.

SEC. 2. FINDINGS.

    The Congress makes the following findings:
          (1) The Alaska National Interest Lands Conservation Act 
        established the Admiralty Island National Monument which is 
        managed by the Secretary of Agriculture, by and through the 
        Forest Service.
          (2) The Forest Service has established a policy of 
        encouraging the acquisition of private land inholdings within 
        Admiralty Island National Monument on a willing buyer/willing 
        seller basis. Congress has supported this policy, for example 
        by passage of the Greens Creek Land Exchange Act of 1996 which 
        provided for a land exchange of certain public and private 
        lands in Admiralty Island National Monument.
          (3) Lands owned by Alaska Pulp Corporation, consisting of 54 
        acres, more or less, located in Hood Bay on Admiralty Island 
        within the boundaries of the Kootznoowoo Wilderness are 
        available for transfer to Federal ownership on a willing 
        seller/willing buyer basis. The acquisition of these lands 
        would provide Federal ownership of this very valuable land in a 
        critical area of Admiralty Island National Monument.
          (4) The United States is the owner of certain reversionary 
        interests to 143.87 acres, more or less, located adjacent to 
        Silver Bay near Sitka, Alaska, which interests were reserved in 
        patent No. 1213671 issued to Alaska Pulp Corporation on October 
        18, 1960. The transfer of the reversionary interests of the 
        United States in such lands adjacent to Silver Bay to the 
        Alaska Pulp Corporation would facilitate future use and 
        development of that land.
          (5) The future acquisition by the United States of the Chaik 
        Bay property on Admiralty Island to be incorporated into the 
        Kootznoowoo Wilderness would be in the public interest.

SEC. 3. DEFINITIONS.

    As used in this Act:
          (1) the term ``ANILCA'' means the Alaska National Interest 
        Lands Conservation Act (16 U.S.C. 3101 et seq.).
          (2) the term ``Company'' means the Alaska Pulp Corporation, 
        an Alaska corporation, its successors, and assigns.
          (3) the term ``Company Property'' means the property depicted 
        on United States Survey Plat 1058 approved March 20, 1917, 
        consisting of approximately 54 acres of land.
          (4) the term ``Federal Property'' means the reversionary 
        interest of the United States described in paragraphs (6) and 
        (7) of the patent dated October 18, 1960, granted by the Bureau 
        of Land Management to Alaska Lumber & Pulp Co., which was 
        recorded at Book 15, Pages 271-23, Sitka Recording District on 
        November 9, 1960. The term ``Federal Property'' does not 
        include the interests described in paragraphs (1) through (5) 
        of the said patent.
          (5) the term ``Monument'' means the Admiralty Island National 
        Monument, which was established by section 503 of ANILCA and 
        which is managed by the Secretary of Agriculture as a unit of 
        the National Forest System.
          (6) the term ``Secretary'' means the Secretary of 
        Agriculture.
          (7) the term ``Sitka'' means the city and borough of Sitka, 
        Alaska, a home-rule borough formed in accordance with the laws 
        of the State of Alaska.
          (8) the term ``Sitka Property'' means the property depicted 
        on the maps entitled ``Sitka Property'', dated August 29, 1997, 
        consisting of approximately 49 acres of land.

SEC. 4. LAND EXCHANGE, TRANSFER, RELINQUISHMENT.

    (a) Exchange of Company and Federal Property.--After the Company 
conveys to the United States, by general warranty deed, all right, 
title, and interest of the Company in and to the Company Property, the 
Secretary shall within 60 days of acceptance of delivery of said deed, 
unconditionally and without limitation except as provided herein, 
relinquish to the Company all right, title, and interest of the United 
States in and to the Federal Property and shall evidence that 
relinquishment by conveying to the Company a quitclaim deed to the 
Federal Property.
    (b) Relinquishment of Property to Sitka.--Upon relinquishment of 
the Federal Property to the Company under subsection (a), the Company 
shall transfer all right, title, andinterest of the Company in the 
Sitka Property to Sitka.
    (c) Availability of Maps.--The maps referred to in section 3(3) 
depicting the Company Property and in section 3(4) depicting the 
Federal Property shall be on file and available for public inspection 
in the Office of the Forest Supervisor, Chatham Area, Tongass National 
Forest, in Sitka, Alaska. The Maps referred to in section 3(8) 
depicting the Sitka Property shall be on file in the office of the 
Manager of the City and Borough of Sitka until the conveyance described 
in subsection (b), at which time the map shall be recorded along with 
the deed.

SEC. 5. PROCESSING OF AND TERMS AND CONDITIONS RELATING TO LAND 
                    EXCHANGE.

    (a) Surveys.--Notwithstanding any other provision of law, the 
Secretary of the Interior may conduct and approve all cadastral surveys 
that are necessary for completion of the exchange. The cost of any 
surveys shall be borne by the Company.
    (b) Equal Value Exchange.--The values of the Federal Property and 
the Company Property are deemed to be of equal value.
    (c) Administration.--The Secretary is directed to implement and 
administer the rights and obligations of the United States under this 
Act.
    (d) Cleanup Obligations.--Nothing in this Act shall impact or alter 
the Company's rights, duties, and obligations regarding investigation, 
remediation, cleanup, and restoration under its September 10, 1995, 
Commitment Agreement with the State of Alaska or other applicable law. 
The Company shall use its property consistent with all restrictive 
covenants, including those restrictive covenants recorded on September 
4, 1997.
    (e) Title Standards.--Title to the Company Property to be conveyed 
to the United States shall be acceptable to the Secretary consistent 
with the title review standard of the Attorney General of the United 
States.

SEC. 6. GENERAL PROVISIONS.

    (a) Management of Company Property.--Upon acquisition of the 
Company Property by the United States pursuant to this Act, said 
property shall be managed as a part of the Admiralty Island National 
Monument and the Kootznoowoo Wilderness.
    (b) Authorization to Negotiate for Acquisition of Property.--In 
furtherance of the purposes of the Kootznoowoo Wilderness, the 
Secretary, acting through the Forest Service, is authorized to enter 
into negotiations with the owners of private property in the Chaik Bay 
on Admiralty Island, with the objective of acquiring such property. The 
Secretary is authorized to enter into an option to purchase or exchange 
agreement with the owners of such property to be effected either 
through existing administrative mechanisms provided by law and 
regulation, or by subsequent ratification by Act of Congress.

                         purpose of the measure

    The purpose of S. 1015 is to provide for the exchange of 
certain lands within the Tongass National Forest, Alaska.

                          background and need

    S. 1015 provides for an exchange of land and interests 
between the United States and the Alaska Pulp Corporation 
(APC). In exchange for the relinquishment of a Federal 
reversionary interest in about 144 acres of land owned by APC, 
the United States would acquire a 54-acre inholding owned by 
APC on Admiralty Island. The land will become part of the 
Kootznoowoo Wilderness of Admiralty Island National Monument. 
In addition, the City acquires ownership from APC of certain 
land containing the City's hydro-electric and water utilities.
    APC constructed a pulp mill on about 144 acres of land it 
was granted by the Federal Government in 1960. The site was the 
major economic force in Sitka, a community on Baranoff Island 
in southeast Alaska, and employed hundreds of workers. The City 
has an easement to use some of the lands for its water supply 
and hydro-electric power. Under a reverter clause in the 
original patent, ownership of the land granted to APC 
(including land occupied by the City), reverts to the Federal 
Government if the mill site is not used for timber processing 
for five consecutive years.
    The pulp mill shut down in September 1993 and Sitka's Mayor 
and Assembly want to put the land back into productive use. 
However the reversionary interest of the United States clouds 
the status of these lands.
    To resolve this problem, S. 1015 provides for an exchange 
in which the Federal Government relinquishes its reversionary 
interest in the mill site land, and property owned by APC on 
Admiralty Island is conveyed to the United States. Acquisition 
of this land is a priority of the Forest Service.

                          legislative history

    S. 1015 was introduced by Senator Murkowski on July 14, 
1997. A Full Committee hearing was held on July 27, 1997. At 
the business meeting on September 24, 1997, the Committee on 
Energy and Natural Resources ordered S. 1015, as amended, 
favorably reported.

           committee recommendations and tabulation of votes

    The Committee on Energy and Natural Resources, in open 
business session on September 24, 1997, by a unanimous voice 
vote of a quorum present, recommends that the Senate pass S. 
1015, if amended as described herein.

                          committee amendments

    During the consideration of S. 1015, the Committee adopted 
an amendment in the nature of a substitute offered by Senator 
Murkowski. In addition to numerous clarifying, technical and 
conforming changes, the bill was reported with an amendment 
authorizing the U.S. Forest Service to enter into negotiations 
for the acquisition of a private inholding in Chaik Bay through 
purchase or exchange.

                      section-by-section analysis

Section 1. Short title

    This section states the title of the bill to be the ``Hood 
Bay Land Exchange Act of 1997''.

Section 2. Findings

    This section establishes certain findings regarding the 
legislation.

Section 3. Definitions

    This section defines the terms to be used in the 
legislation.

Section 4. Land exchange, transfer, relinquishment

    Section 4(a) requires that within 60 days after the Alaska 
Pulp Company (APC) conveys all right, title, and interest of 
the company to the 54 acres of property on Admiralty Island, 
the Secretary of Agriculture shall relinquish to APC all right, 
title, and interest of the United States in and to the 143.87 
acres of Federal property as described in Section 3, through a 
quitclaim deed. Section 4(b) requires that APC, after receipt 
of title to the 143.87 acres of land, transfer approximately 65 
acres, as described in Section 3 to the City of Sitka. This 
land is currently used by the city for its Blue Lake Hydro 
Facility and easements to the facility. Section 4(c) requires 
that the maps depicting the Company property and the Federal 
Property be on file and available for the public at the Office 
of the Forest Supervisor, Chatham Area, Tongass National 
Forest, in Sitka, Alaska. The maps depicting the Sitka Property 
are to be held at the office of the Manager of the City and 
Borough of Sitka, Alaska.

Section 5. Processing of and terms and conditions relating to land 
        exchange

    Section 5(a) allows the Secretary to conduct and approve 
cadastral surveys needed to complete the exchange and requires 
APC to bear the cost of any such surveys. Section 5(b) 
recognizes that the properties being exchanged are of equal 
value. Section 5(c) directs the Secretary to implement and 
administer the rights and obligations of the United States 
under this Act. Section 5(d) clarifies that this Act is not 
intended to impact or alter APC's rights, duties and 
obligations regarding investigation, remediation, cleanup, and 
restoration under its September 10, 1995 Commitment Agreement 
with the State of Alaska or other applicable law. Additionally, 
this provision requires APC to use the 143.87 acre property 
consistent with all restrictive covenants, including those 
recorded on September 4, 1997.

Section 6. General provisions

    Section 6(a) directs that the 54 acres of property to be 
acquired by the United States be managed as part of the 
Admiralty Island National Monument and the Kootznoowoo 
Wilderness. Section 6(b) authorizes the Secretary to enter into 
negotiations with owners of private property in Chaik Bay on 
Admiralty Island, with the possibility of acquiring the 
property. The Secretary is authorized to enter into an option 
to purchase the property or exchange it for other property in 
his control through existing authority or by subsequent 
ratification by Congress.

                   cost and budgetary considerations

    On September 24, 1997 the Committee on Energy and Natural 
Resources requested cost estimates to be prepared by the 
Congressional Budget Office for S. 1015. These reports had not 
been received at the time the report on S. 1015 was filed. When 
the reports become available, the Chairman will request that 
they be printed in the Congressional Record for the advice of 
the Senate.

                      regulatory impact evaluation

    In compliance with paragraph 11(b) of rule XXVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1015. The bill is not a regulatory measure in 
the sense of imposing government-established standards or 
significant economic responsibilities on private individuals 
and businesses.
    No personal information would be collected in administering 
the program. Therefore, there would be no impact on personal 
privacy.
    Little, if any, additional paperwork would result from the 
enactment of S. 1015, as ordered reported.

                        executive communications

    On September 25, 1997 the Committee on Energy and Natural 
Resources requested legislative reports from the Department of 
Agriculture and the Office of Management and Budget setting 
forth Executive agency recommendations on S. 1015. These 
reports had not been received at the time the report on S. 1015 
was filed. When the reports become available, the Chairman will 
request that they be printed in the Congressional Record for 
the advice of the Senate. The testimony provided by the Forest 
Service at the Committee hearing follows:

 Statement of Janice McDougle, Associate Deputy Chief, U.S. Department 
                             of Agriculture

    Mr. Chairman and Members of the Committee: Thank you for 
the opportunity to discuss S. 1015, the Admiralty Island 
National Monument Land Exchange Act of 1997. I am Janice 
McDougle, Associate Deputy Chief for National Forest System. I 
am accompanied by Eleanor Towns, Director of Lands in the 
Washington Office.
    S. 1015 would authorize the United States to acquire 
approximately 54 acres of privately-owned lands in the 
Admiralty Island National Monument and Kootznoowoo Wilderness 
in exchange for the relinquishment of its reversionary 
interests in lands near Sitka, Alaska. The bill would also 
facilitate a transfer of lands with current and future economic 
benefits to the City and Borough of Sitka.
    S. 1015 authorizes relinquishment of a Federal reversionary 
interest in 144 acres of land at the Alaska Pulp Corporation 
(APC) pulp mill site at Silver Bay near Sitka for 54 acres of 
undeveloped land owned by APC on the Admiralty Island National 
Monument on the Kootznoowoo Wilderness. It also authorizes a 
transfer of approximately 49 acres that are currently occupied 
by the City of Sitka at the pulp mill site at Silver Bay from 
APC to the City and Borough of Sitka.
    The Administration supports acquiring the 54 acres of land 
at Hood Bay on Admiralty Island National Monument, but the 
issues surrounding the lands involved in the legislation--and 
the provisions of the legislation itself--are complex enough to 
require more time for additional review than we had available 
to prepare for this hearing. We will continue to work with the 
Members of the Committee and the proponents of the bill on 
these issues and provide the Administration's position as soon 
as possible.
Admiralty Island National Monument and Kootznoowoo Wilderness
    Admiralty Island National Monument, established by 
proclamation in 1978, is a national treasure. By the end of 
1990, nearly one million acres of the island had been 
designated wilderness. The island is home to the densest 
population of Alaskan brown bears in the world. It is also home 
to large populations of bald eagles and other wildlife species.
    Approximately 1,350 acres within the million-acre 
wilderness are small, privately-owned parcels of land. Whenever 
possible, the Forest Service works to acquire these inholdings 
from willing sellers to ensure the protection of the resources 
on the Admiralty Island National Monument. S. 1015 would 
provide for acquisition of 54 acres owned by Alaska Pulp 
Corporation (APC) in Hood Bay.
The lands at Silver Bay
    The Silver Bay mill site property is approximately 144 
acres and is currently owned by APC. These lands were patented 
to APC in 1960 in accordance with the Act of June 11, 1960 (74 
Stat. 205) and the joint resolution of Congress of August 8, 
1947 (61 Stat. 920). The patent was issued subject to, among 
other things, the following express conditions:

          (1) The grantee, its successors or assignees, shall 
        use the lands herein granted only in connection with or 
        for the processing of timber; and (2) upon non-use by 
        the patentee, its successors or assignees, for five 
        consecutive years of the pulp mill installed on the 
        land herein granted, or upon use of such land other 
        than in connection with or for the processing of 
        timber, the rights of the grantee, its successors or 
        assignees in and to such land shall terminate and the 
        Secretary of Agriculture shall declare the title to 
        such land revested in the United States.

    On September 30, 1993, APC closed its pulp mill at Silver 
Bay. On April 14, 1994, the Forest Service terminated its long 
term timber sale contract with APC. Since then, the mill has 
been idle and APC has been seeking through litigation and other 
means, to obtain clear title to the land by extinguishing the 
United States' reversionary interest.
    One question related to this legislation is how to value 
the Government's reversionary interest to ensure that an equal 
value exchange occurs.
    Another complex issue surrounding the legislation and the 
exchange is the environmental condition of the Silver Bay Mill 
Site property. Several Federal and State agencies as well as 
the residents of the area have expressed great concern about 
the clean up of hazardous substances from the mill site. 
Because the mill site is currently zoned ``industrial,'' the 
State has authorized APC to clean the site based on industrial 
standards, but the Forest Service has advocated that the State 
require APC to clean the site to a residential standard given 
that the property could revert to the United States and that it 
has potential for some type of high-use public recreation area.
Hydroelectric operations at Silver Bay
    Currently, 49 acres of the APC site are occupied by the 
City and Borough of Sitka under a Federal Power Act license and 
agreements with APC. Because the City and Borough had the 
rights to develop the water and APC had extensive need for both 
water and electricity, the parties entered into various 
agreements for the City to supply both water and hydroelectric 
power to the Corporation.
    Section 4(b) of the bill directs APC to transfer the 
portions of the pulp mill site currently used by the City of 
Sitka for hydroelectric operations upon relinquishment of the 
Federal interests in the land.
    Another issue that the Administration must explore is the 
position of the Federal Energy Regulatory Commission (FERC) 
regarding the proposed relinquishment of the reversion by the 
Federal government and the affect that the relinquishment may 
have on the FERC license.
The lands at Hood Bay
    In exchange for the Government's reversionary interest at 
the Silver Bay mill site, APC will grant the United States 54 
acres of land it owns at Hood Bay on Admiralty Island. These 
lands were patented in 1922, under authority of the Forest 
Homestead Act of June 11, 1906. They are within the boundaries 
of the Tongass National Forest, Admiralty Island National 
Monument, and the Kootznoowoo Wilderness. Upon completion of 
the exchange, these lands will become part of the Admiralty 
Island National Monument and Kootznoowoo Wilderness.
    Based on preliminary valuation documentation provided by 
APC, the resort development of some kind. Currently there are 
no restrictions on its use of development.
Recommendations for S. 1015
    In addition to the serious and complex issues I have 
described above, based on our preliminary review, the 
legislation as introduced requires several technical and 
substantive changes to meet our concerns.
    The technical changes would clarify the descriptions of the 
lands at Hood Bay and the lands at Sitka in Section 3. Also, 
Section 6 should be amended to clarify that the lands received 
from APC would be managed as part of the Kootznoowoo 
Wilderness.
    In terms of substantive changes, the Administration has 
great concern about the provisions of Section 5 of the bill. We 
would recommend the addition of language in Section 5(a) to 
provide that if new surveys are needed, they will be paid for 
by APC, and to clarify the responsibility for cadastral 
surveys. Language in Section 5(b) concerning the values of the 
land at Hood Bay and the reversionary interest of the 
Government at Silver Bay should be amended or deleted once the 
valuation issues are resolved. As you are aware, Section 206(b) 
of the Federal Land Policy and Management Act requires lands or 
interests in lands of equal values for land exchanges or the 
payment of cash to equalize values if they are not.
    Also, the Administration strongly objects to language in 
Section 5(d) exempting the exchange from NEPA, National 
Historic Preservation Act, title VIII of ANILCA, or any other 
law. Such exemptions undercut the applicability of laws, 
undermine enforcement, possibly lead to serious environmental 
problems, and set a dangerous precedent by encouraging similar 
waivers.
    As we review this legislation, we will provide any 
additional suggestions we might have to improve the bill.
Closing
    The issues surrounding this legislation are varied and 
complex. All of these issues must be thoroughly explored and 
analyzed before the Administration decides on the best way to 
proceed with APC and the acquisition of Hood Bay.
    As I said earlier, Mr. Chairman, the Forest Service would 
like to acquire the inholding at Hood Bay. We will work with 
Members of the Committee and proponents of this legislation to 
resolve the issues involved in this exchange.
    This concludes my statement, Mr. Chairman. We would be 
happy to answer any questions you or other members of the 
committee may have.

                        CHANGES IN EXISTING LAW

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, the Committee notes that no 
changes in existing law are made by the bill S. 1015, as 
ordered reported.

                                
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